Barclays Denies Reports That It Will Close 400 Branches

A day after it was reported that the bank would close hundreds of branches, Barclays stated no such plans exist, but left the door open for future closings.

After media reports surfaced yesterday that Barclays will close nearly a quarter of its 1600 U.K. branches, the bank responded by denying that it plans making any “significant” branch closures in a statement released today.

U.K publications reported that Antony Jenkins, Barclays’ chief executive, said the bank would cut the branch network, as well as 400 employees from its investment division. Jenkins will announce the banks’ fourth quarter results on Feb. 11, when he is also expected to reveal a new five year plan for the bank to increase its profitability, which will include cutting 1.7 billion pounds in costs by next year, media reports said. The bank is also urging employees to cut down on non-essential travel expenses, reports added.

The bank denied the branch closings, but said in a public statement that it is considering closing some branches over time as “increasing use of technology is changing the way in which customers choose to do their banking and creates opportunities for Barclays to offer new services in new ways.” But the bank stated that there is currently no time frame for those closures.

Reports of the closures generated some public backlash against the bank, explaining why the bank would be so quick to respond publicly and clarify its plans. Barclays said that any future branch closures would be driven by customer need, not by cost-cutting, and added that it would “never leave a community without the ability to transact.”

Jonathan Camhi has been an associate editor with Bank Systems & Technology since 2012. He previously worked as a freelance journalist in New York City covering politics, health and immigration, and has a master's degree from the City University of New York's Graduate School ... View Full Bio

Agreed - even with the growth of mobile, I think there will always be some demand for in-person banking services. After large banks turn towards mobile, other companies will take advantage of that space.

I agree, it's a broader trend that, as Greg notes below, is not going to reverse, especially as younger consumers who prefer mobile/online become the dominant customer segment. That said, as the established players (not just in the UK) scale back the branch channel, there no doubt will be some players -- whether smaller banks, or non-traditional competitors, whether retailers or tech companies or something else -- that will see an opportunity to offer an improved take on the branch & redefine brick/mortar and face2face banking.

It is obviously a cost cutting measure and the number of branches that will eventually close will likely be greater than 400 eventually. It may not happen in 2015 or 2016 or 2017, but it will happen. And other banks will follow along.

This happens every few years...banks close branches, but then they start opening new branches a few years later. However, I don't think we will see the swing back to opening 'new' branches like we have seen in the past. The increasing use of online and mobile options is making it harder and harder to justify the expense of keeping a bank branch in every community.

This is not a statement I can trust.. "Barclays said that any future branch closures would be driven by customer need, not by cost-cutting, and added that it would Gǣnever leave a community without the ability to transact.Gǥ

Never say never! Customer need is rather dependent on what Barclays thinks the customer needs/wants, and as @ubm_techweb_disqus_sso_-b3da3b9f0f8591eefdd1839944e9ac12:disqus points out, customers will not be happy about removed or changed options - only by additions.

The backlash was around under-served communities. Several of the reports in the U.K. media cited a study by a consumer rights group there that basically outlined some of the ways that branch closures can hurt small business and elderly customers.

The branch closures are obviously a cost cutting move. But as the article about "public backlash" notes, some branches are under utilized because customers have switched to online banking. It seems like banks prefer to put ATMs inside supermarkets and shopping malls. Cutting its branch network could lead certain customers high and dry. It remains to be seen how Barclays uses technology - perhaps mobile - to service its customers.

Do you(or does anyone) know if, in the UK, branch employees are unionized? Something tells me they may be, which would suggest one reason why Barclays management was so quick to deny (backtrack?) this announcement. Also, I wonder if the public criticism was mainly about job losses (there's been some recent analysis that the improvement in unemployment numbers is a "London recovery" versus a country-wide recovery) or about underserved communities/neighborhoods. Regardless, all banks should be paying attention here, since all banks will be closing branches due to channel shifts. Messaging and positioning will be as important as technology.